Oil prices: headed for a Goldilocks scenario?

Oil derricks at Sinopec’s Shengli field in eastern China
Low oil prices have forced closures or cutbacks by many high-cost producers, including parts of the aging Shengli field run by China’s Sinopec (source: dpa)
  • Oil prices appear headed for a period of stability at moderate levels
  • Western Europe, Russia, China and India will benefit geopolitically
  • Greater predictability will encourage investment and boost world growth
  • Political tensions in oil-producing areas could generate bouts of volatility

After getting burned for years, many economists are reluctant to make predictions about oil prices. This report argues that crude is bound to stabilize somewhere between $50 and $60 per barrel. Volatility will still be acute, but the dynamic of supply and demand is now clear enough and unlikely to change in the near future.

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